Gold prices retreated last week even allowing for dollar weakness which saw the euro rally to a new high for the year. The background for gold as a safe heaven is undermined now by the improved US economic data released at the beginning of the month.
On Friday, market players sold the market beneath the trend of higher lows from the late 2011 lows. These losses have undermining the bullish sentiment, which had prevailed during January and early February pushing the metal up 10% on the year.
However, the news that the Greek cabinet unanimously approved deeper spending cuts late Friday, European time, should be positive for the gold next week, the recent pattern of dollar weakness provoking gold purchases is to continue.
A push back above $1,731 an ounce would see the market retest this year’s high at $1,759 and then move towards $1,800.
Most participants in the Kitco News weekly Gold Survey also expect gold prices to rise in the coming week, but stay roughly in the current price range. Out of 32 participants, 13 see prices up, while seven see prices down, and four are neutral on prices. Market participants include bullion dealers, investment banks, futures traders, money managers and technical chart analysts.
